Europe close: Stocks end mixed after surprise BoC rate hike
By Alexander Bueso
Date: Wednesday 07 Jun 2023
(Sharecast News) - European shares were mixed at the end of Wednesday's trading session following a surprise interest rate hike out of Bank of Canada.
It was the second surprise from a major central bank in as many days and came as investors waited on rate announcements in the US, euro area and Japan scheduled for over the following week.
News of a slump in exports from China last month also dented sentiment, as did an OECD forecast for just a slight rise in global economic growth in 2023.
The pan-European Stoxx 600 drifted lower by 0.19% to 460.80. while Germany's Dax ended off by 0.2% to 15,960.56.
Italy''s FTSE Mib and Spain's Ibex 35 on the other hand were higher.
China's exports fell last month in another indication that the rebound in the world's second-largest economy was losing steam.
Exports fell by 7.5% in May to $283.5bn on an annual basis, a sharp reversal from the increase of 8.5% in April, data released by China Customs showed.
The May figure was below the expectations of a fall of 0.1%. Imports fell by 4.5% to $217.7bn, up from a fall of 7.9% in April, and above expectations of a 6.8% fall.
"This is being taken as fresh evidence of China's bumpy recovery from the pandemic and another sign that the snap back in activity is waning sharply," said Hargreaves Lansdown analyst Susannah Streeter.
"Higher inflation in key markets, is likely to be part of the picture, given that the tightening of monetary policy is designed to curtail consumer spending power and with people buying fewer goods that they want but don't necessarily need, Chinese exports are becoming casualties."
The global economy is forecast to grow moderately this year as inflationary pressures ease, but a recovery was still some way off, the Organisation for Economic Co-operation and Development (OECD) said in its latest forecasts.
The Paris-based organisation is now forecasting growth of 2.7%, up from 2.6% in its March report, with upgrades for the US, China and the eurozone.
Forecasts for the US and China were lifted by 0.1 percentage points to to 1.6% and 5.4% respectively.
The eurozone was increased by 0.1 points to 0.9% while Britain was upgraded to avoid a recession, with growth now forecast at 0.3% instead of a contraction, but Germany was lowered to zero growth.
In corporate news, shares in Inditex gained after the Zara brand owner reported a 16% jump in sales of its spring-summer collection.
Danske Bank shares jumped after the Danish lender raised its long-term earnings target.
Atos fell despite the IT firm forecasting sales at loss-making unit Tech Foundations to hit bottom in 2024.
Shares in Sweden's Viaplay plummeted again after the departure of CEO Anders Jensen.
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN